MEDICARE 101

Understanding Medicare

Medicare is the federal health insurance program you’ve earned through years of work and payroll taxes. For most, coverage kicks in automatically at age 65 when you start receiving Social Security benefits—but understanding your options can save you money and stress.

In 2025, costs and benefits have shifted, so let’s break it down: Original Medicare (Parts A and B), Supplement (Medigap) plans, and Medicare Advantage (Part C) plans.

Original Medicare: The Basics

Original Medicare includes two parts:

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facilities (after a 3-day hospital stay), hospice, and some home health care.
  • 2025 Costs: No premium for most (if you worked 10+ years); otherwise, up to $518/month. The hospital deductible is $1,676 per benefit period, with coinsurance like $419/day for days 61–90.
• Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and medical equipment.
  • 2025 Costs: The standard premium is $185/month (up from $174.70 in 2024), with a $257 annual deductible. After that, Medicare pays 80%, leaving you with 20% coinsurance.

The Catch: There’s no out-of-pocket maximum. Imagine a $50,000 surgery—Medicare covers $40,000 after deductibles, but you’re still on the hook for $10,000 (plus deductibles). That’s where extra coverage comes in: Medigap or Medicare Advantage.

Option 1: Medigap (Supplement Plans)

Medigap plans are private insurance policies that “fill the gaps” in Original Medicare, covering that 20% coinsurance and often deductibles too. They’re labeled by letters (e.g., Plan G, N, F, M), and every plan with the same letter offers identical benefits—only the premiums differ by insurer.

Pros:

• Freedom: Visit any doctor nationwide who accepts Medicare—no networks or referrals.
• Predictability: Pay your Medigap premium (varies widely, often $100–$300/month) plus the Part B premium ($185), and most other costs vanish—no copays for doctor visits!
• Simplicity: Billing is straightforward with minimal surprises.

Cons:

• No Extras: Medigap doesn’t cover prescription drugs (Part D), dental, vision, or hearing—you’d need separate plans with their own premiums.
• Cost Creep: Premiums can be higher than Advantage plans and often rise as you age.

Best For: Those who want flexibility and don’t mind paying more upfront for peace of mind.

Option 2: Medicare Advantage (Part C)

Medicare Advantage plans, run by private insurers, bundle Parts A and B (and often Part D) into one package. Medicare pays these companies a subsidy to manage your care, and they often toss in extras like dental or vision.

Pros:

• Affordable: Many plans have $0 premiums beyond your Part B premium ($185/month in 2025).
• All-in-One: Drug coverage (Part D) and perks like dental, vision, or hearing are often included—sometimes at no extra cost.
• Cost Cap: In 2025, the max out-of-pocket limit is $9,350 for in-network services—once you hit it, the plan covers everything else that year.

Cons:

• Networks: You’re usually limited to a specific group of doctors and hospitals—step outside, and costs climb.
• Variable Costs: Expect copays (e.g., $20/visit) or coinsurance, which can add up until you hit that out-of-pocket cap.

Best For: Budget-conscious folks who like bundled benefits and don’t mind network trade-offs.

Key Updates for 2025

• Part D Boost: Prescription drug plans now cap out-of-pocket costs at $2,000/year (including deductibles and copays)—a game-changer if you take pricey meds. You can even spread payments monthly with the new Medicare Prescription Payment Plan.
• Rising Costs: Part B’s $185 premium and $257 deductible are up slightly, and Part A deductibles jumped to $1,676. Plan accordingly!
• Plan Choices: Advantage and Part D options shrank a bit, so comparing plans is more critical than ever.

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Which Is Right for You?

It depends! Medigap offers freedom and predictability but at a higher monthly cost. Advantage plans save upfront and add benefits but lock you into networks. Your health needs, budget, and preferred doctors all play a role.

Let’s Talk!

Medicare’s a maze, but you don’t have to figure it out alone. I’m Scott, your local Medicare Advisor, and I’d love to review your situation—whether you’re new to Medicare or rethinking your plan for 2025. Call me at 980-829-2290 for a no-pressure chat. Let’s get you the coverage you’ve earned!